EconSouth (Third Quarter 2004)

EconSouth (Third Quarter 2004)

TheStateof
theStates
Recent events and trends from the six states of the Sixth Federal Reserve District

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Huntsville International Airport announced
plans for an $87 million expansion that will increase the
airports passenger capacity. Construction begins this fall
and will take five years.

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Automotive parts supplier Mando America Corp. announced
plans to spend $35 million in an expansion of its Opelika
plant. The company will add 170 jobs to its current workforce
of 150. It will also move its headquarters from Detroit,
Mich., to Opelika. The plant will make parts for Montgomerys
new Hyundai plant as well as for other automakers.

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Kronospan, a German wood flooring firm, will
invest $200 million$300 million in a new plant in north
Alabama, creating about 400 jobs.

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Northrop Grumman in Huntsville will support
production of the U.S. Armys Viper Strike weapon system,
designed to destroy targets without damaging nearby objects.
DRS Technologies, also in Huntsville, received a $30 million
contract to provide diagnostic systems for the Armys Bradley
Fighting Vehicle.

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Tourism officials say Floridas summer season
has been strong as international visitors took advantage of the
weak dollar and good weather. Hotel occupancy, restaurant sales,
and theme park attendance were up over year-ago levels. But tourism
activity declined significantly in late August and September as
a series of hurricanes deterred visitors.

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South Florida residential builders and real estate
agents report that June and early July construction was
up slightly compared to last year while sales jumped significantly.
Although prices for some building materials rose, builders
have reportedly been able to pass the costs along to buyers.

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Damage estimates from hurricanes Charley
and Frances range from $22 billion to $30 billion. The Insurance
Information Institute estimates that the insurance industry
will pay $6.5 billion in claims from Charley alone. Flood
damage caused much of the uninsured losses. Rebuilding efforts
will boost the construction industry. Damage to citrus crops
is expected to significantly affect farm proprietors income.

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The states transportation equipment sector
continues to expand. Fleetwood Enterprises, the worlds
second-largest producer of motor homes and travel trailers,
opened another manufacturing plant in Georgia to meet rising
demand. The companys Alma plant, which opened in August,
employs about 150 workers. TI Automotive, an auto parts
maker, will build a $30 million plant and create 100 jobs
in northeast Georgia by 2006.

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About 1,400 employees at the Brown & Williamson
Corp. cigarette factory in Macon lost their jobs in mid-August
as the company completed a merger with R.J. Reynolds Tobacco
Co. The factory was middle Georgias largest manufacturing
plant.

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The states carpet and floor covering industry
is enjoying continued strength in the residential remodeling
market, and industry executives report seeing increased
demand for carpet in the commercial segment.

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Union Tank Car Co., one of the nations largest
railcar leasing firms, announced that it will construct
a new $100 million manufacturing plant with a weekly production
capacity of about 70 tank cars per week at England Industrial
Air Park and Community, located in Alexandria. About 700
manufacturing jobs are expected to be created by the project,
which is anticipated to be open by 2006.

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The average Louisiana oil rig count held
at 167 in July compared to 158 a year earlier while the
national rig count climbed by 37 to 1,213. The average price
of Louisiana sweet crude rebounded in July to $40.22 per
barrel from Junes $38.26 rate. While the price of Louisiana
natural gas came down modestly in July, analysts expect
prices to remain high because of declining domestic reserves,
import difficulties, and higher demand.

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Gross revenue in Mississippi casinos increased
5.9 percent during the first six months of 2004 compared
to the same period in 2003. The opening of a second casino
in Natchez will bring 300 to 400 new jobs to the city and
will reduce the impact of the recent closing of the nearby
International Paper plant.

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A Pascagoula company, Rolls Royce Naval Marine,
has been awarded a contract to manufacture aircraft carrier
propellers for the U.S. Navy. The plant is constructing
an 18,000-square-foot expansion to accommodate the new business.

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Magnolia Label Co., a producer of labels for food
products and consumer goods, will more than double its plant
size by the end of the year and add about nine employees
when it constructs a new facility in Byram. The company
ships labels to domestic firms as well as to companies in
China, Israel, Japan, and Vietnam.

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Tennessee tractor and trailer manufacturing
plants are running at maximum capacity. Trucking firms are
increasing rates to offset several increasing expenses—new
tractors and trailers, fuel, insurance, and drivers wages.
High demand for trucking is allowing firms to pass along
these increased costs in the form of rate hikes.

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Next to its Decherd facility, Nissan will
construct a $47.3 million plant that will build crankshaft
forgings for all vehicles the automaker produces in the
United States. The new plant is expected to employ 70 people.

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Quebecor World Inc. will cut 450 jobs at its Kingsport
printing plant, which currently employs 950 people.

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State Farm Insurance Co. will add about 400 jobs
at its Murfreesboro operations center to expand its claims,
billing, and customer service operations.

Compiled by the regional section
of the Atlanta Feds research department